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Assisted LivingDevelopmentManagement

Build an Assisted Living Business, Not Just a Facility

By May 22, 201312 Comments

I spoke at a conference recently on the topic of starting an assisted living facility. Some of the questions from the audience indicated that there were some who, in my humble opinion, were not asking the right questions.

Questions included things like:

“How important is location?”

“How long will it take to fill a new facility?”

“Are there any special loans or grants available?”

These are good and important questions. But all of the questions from the audience involved the property, the financing and construction – real estate questions.

After answering all of these questions, I told the audience that I think they need to keep something very important in mind. That is…

Build a Business, Not Just a Facility

An assisted living facility is a combination of housing and services. I often see many focus on the housing and not on the services, usually on their way to problems. When you’re thinking about the services your facility will offer and the business that you’ll operate, there are several issues to consider. Here’s a short list to start your planning.

Program – Who will you serve? What is your niche? How do you stand out from your competitors?  Is there a market for what you plan to offer?

Financial Management – I often ask new buyers how they plan to handle payroll, and it seems many have never given it a thought. Providers that don’t start with solid financial management and systems are almost always facing challenges. What’s your break-even point and do you have enough capital reserves?

Human Resources – If this is your first assisted living community, you may be the owner and also the administrator or executive director, too. Or, will you hire a management company to oversee day to day operations? And, if you’re expanding, how will you prevent yourself from being spread too thin and losing control of quality? Will you hire management staff to share the workload? Where will your employees come from and how much will they cost – not just pay rates but taxes, benefits and more?

Marketing – You can’t get by with a simple Yellow Page ad anymore. What resources will you need to fill your facility? How will you get your message out? And what is your message? Don’t try to be all things to all people in your program or in your marketing.

Exit – It’s never to early to know your exit strategy. When you’re starting your business, it’s important to know why. It’s also important to have an idea of what you want to accomplish so that you will know when you’ve met your goal, and when it might be time to exit. As you begin and expand your business, having an exit plan in mind may save a lot of trouble and money later.

This is a high level overview of a big topic and just an introduction of the items that might make up your business plan. Stop back to this site for a closer look at these and other issues in future posts.

Most assisted living and senior care providers do a great job of balancing housing and services, their real estate and their business. But if you’re getting started or you’re expanding, remember to build your business and not just your next facility.

Please share your experience with a comment. What do you wish you’d known about your business when you were starting out or embarking on expansion?


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  • Kimberly Adams says:

    I am very interested in opening an assisted living facility; however, I am not quite sure of the first steps that need to be taken. Any information will be appreciated.


    Kimberly Adams

    • Mike says:

      Kimberly – First things first: have you worked in an assisted living facility or something similar? do you have a background in health care or working with seniors? If not, my recommendation of a first step is almost always to find opportunities to get some experience and confirm your understanding about what assisted living facilities are all about. I’ve had some clients decide it wasn’t for them after making a big investment that turned into a bad investment. And sorry if I’m starting too far at the beginning. If you have some experience and you know this is something you want to do, look for an existing assisted living facility that is running OK but needs some new energy. It’s tough to get started, and even tougher when everything you’re doing is starting from scratch. Take over for someone else if you can. It may cost a bit more up front but it may save you a lot by lowering your risk and flattening your learning curve. That’s where I’d start. Please stay in touch and keep coming back here as new questions come up. Mike

      • Melissa says:


        What do you find is the best way to find existing RAL/group home facilities? Is there a database somewhere? A state office to reach out to?

        • Mike says:

          Most assisted-living facilities are licensed by their state. Licensing information varies from state to state so you may or may not be able to get access. Please reply and let me know what state you’re in and we may be able to help you.

          • Melissa says:

            Thanks for the quick reply, I’m in Illinois and we are planning on setting our first one in Cook County.


  • Chelene Harris says:

    Hello Mike,
    I have been reading all your articles trying to gain as much knowledge as possible. I recently passed my core competency test. My husband (a real estate broker) and I are looking to open our own facility. I am in the process of creating my business proposal. I have also printed all forms and check lists we need for licensing. Can you please advise if I am on the right track. Any information you could provide would be greatly appreciated.

    • Mike says:

      Chelene – Depending on where you’re located, you may have some specific rules to follow for both opening and operating the facility. Look into a trade association for assisted living providers on either the local or state level so you get information for your specific location. Consider their training opportunities and take advantage of every networking opportunity, too. Please keep checking back here for comments, questions and answers from our readers and this great community that’s forming at Thanks for being a part of it. Mike

  • Priya Ira says:

    Hi Mike, I’m structural engineer by profession and I know of a ten acre land that is available. I know all the resources to get an assisted living facility built. I can make sure of the most effective design and construction. I need to know if the logistics are good enough to get into this business. Where do I start? How do I find a management company to run the facility? I’d like to be a developer of such facilities here in Midwest. What is the demand for such facilities?

    • Mike says:

      Priya – I’ll try to answer your questions in reverse order. 1) Demand for assisted living facilities is strong but supply in some markets already meets or even exceeds current supply. It’s important to understand supply and demand in your specific market. 2) You can find a management company in a number of ways. A good way to find an assisted living management company is to contact a trade association for assisted living providers in your state – they often have members who are management companies looking to grow. Or, get back to me with more details about the size, type and location of your proposed facility and I may have some managers for you to connect with. 3) Where do you start? Well, market feasibility is often a good place to start if you know that market you want to serve. You may also want to get connected with those trade associations to participate in some networking opportunities and learn from those you meet. And, of course, please keep checking back here and subscribe to our newsletter for tips, tricks and case studies. Stay in touch – Mike

  • Lindsay says:

    I’m looking for some guidance with detailing our job descriptions for our aides, any resource that could be helpful with this? Thanks!

    • Mike says:

      Lindsay – Check with the trade association in your state for assisted living providers. They might have what you need or training that would provide a resource. You asked a great question: I’ll try to get some examples that we can post here on the site. Thanks. Mike

  • Shandice says:

    Hello, I’m currently a CNA going to school for RN. I wanted some information on what I need in order to start a small ALF. My plans are to get it up and running within 3 years.What steps should I take?

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